Sunday, February 11, 2007

Recycling economics

Phoenix just started up it’s second recycling plant. The capital cost was $16.2 million and it will cost $5.5 million to operate for 3 years. $13.5 million in revenue is expected in that time. Looks to me like we’ll get $8 million net over 3 years and have an undiscounted payback period of about 6 years. Not bad for a public sector project.

The $16.3 million "materials recovery facility" with state-of-the-art machinery is part of the North Gateway Transfer Station, where household trash is brought by city garbage trucks for recycling or for transfer to a landfill in Buckeye…

The plant will handle 50,000 tons , or 100 million pounds, of materials annually for now. It was designed to handle more than 100,000 tons, said Terry Gellenbeck, solid waste administrative analyst for the city's public works department.

The plant costs almost $2 million a year to operate, or $5.5 million for a three-year contract with the Hudson Baylor Corp., which specializes in the work. The city expects to receive $13.5 million in revenue from the sale of recyclables during that time.

It also is expected to cut down on transportation costs and extend the life of the new landfill near Buckeye.

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